Bill enacts items from Alberta’s 2019 Budget, including measures to cancel several tax credits
Alberta's 2019 Budget Bill received Royal Assent on December 5, 2019. Bill 20 cancels several tax credits, including the Scientific Research and Experimental Development (SR&ED) Tax Credit. The bill also introduces the framework for the new film and television tax credit.
The bill includes several personal income tax measures announced in the budget, including amendments to pause the annual indexation of personal non-refundable tax credits and tax bracket thresholds, replace the Alberta Child Benefit and Alberta Family Employment Tax Credit, cancel tuition and education credits and effectively increase the eligible dividend tax rate in 2021 and 2022.
The corporate income tax measures in Bill 20 are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) on October 28, 2019, the date Bill 20 received first reading (as Alberta has a majority government). The corporate income tax measures in Bill 20 are considered enacted for U.S. GAAP purposes on December 5, 2019, the date the bill received Royal Assent.
Corporate Income Tax Measures
The bill eliminates the SR&ED Tax Credit starting in 2020. As a result, expenses incurred after December 31, 2019 are no longer eligible for this credit.
The bill also cancels:
As announced in the budget, the bill provides that Alberta shall not grant new approvals for these four credits after October 24, 2019.
Notably, this bill introduces the film and television tax credit, which will allow eligible companies to claim 22% of eligible expenditures less designated assistance amounts, to a maximum amount to be defined by regulation (the budget indicated the maximum amount would be $10,000,000). To claim the credit, companies must apply for a certificate and include that certificate when filing their tax returns. The effective date of the tax credit will be set by proclamation; however, the budget indicated that these measures would take effect in the spring of 2020.
For more information, contact your KPMG adviser.
Information is current to December 17, 2019. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
© 2020 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.